Sales Tax Rise Slows

Sales tax collections rose 5.2% in January, but Texas Comptroller Susan Combs said a slowing rate of growth points to a weakening economy.

“While growth remains firm, it is slower than that of the past two years,” Combs wrote in a prepared statement. “This moderation is consistent with the slowing economy.”

Sales taxes are a key source of revenue for Texas, which does not have an income tax. The state also relies heavily on property taxes for funding schools and other programs.

Combs this month also distributed $640.8 million in local sales taxes to Texas cities, counties, transit systems, and special purpose taxing districts. The amount distributed was up 5.1% from the local sales tax distribution in February 2007.

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